July 2, 2018 Read More →

Commentary: Pipeline purchase likely to leave Canadian taxpayers on the hook

Fortune.com:

The Canadian government’s decision to buy the Trans Mountain Pipeline and expansion project for 4.5 billion Canadian dollars has left many wondering: What is Prime Minister Justin Trudeau thinking?

All around the world, decisions to drill new oil wells; frack for gas; mine new coal; and build pipelines, ports, and fossil-fueled power stations are attracting determined opposition from scores of ordinary citizens. People are mobilizing to protect local land, water, and air from pollutants and demand good governance in the face of opaque processes and corrupt corporate-government deals. They are increasingly invoking an emerging principle that connects these projects to climate change: In a world facing catastrophic global warming, new fossil fuel projects are morally wrong. To this moral message is added a prudential one: As the transition away from fossil fuels gathers pace, new fossil fuel projects become economically risky propositions.

The Trans Mountain expansion project typifies all of these concerns. It has attracted vociferous opposition from a broad coalition in Canada, the U.S., and beyond. To the project’s proponent, Texan multinational Kinder Morgan, the multiplicity of concerns and the groups voicing them represent risks to the project’s profitability. So crippling were these risks that Kinder Morgan refused to proceed with the project unless it could offload them onto third parties.

Enter Trudeau.

The Trudeau government thinks it can manage these project risks and turn a profit, or at least break even, from the expanded pipeline. If the Canadian government profits, it will be at the expense of trampling on First Nations’ land rights and exposing communities to oil spills. (The recent Kinder Morgan spill in British Columbia was 48 times larger than first reported.) Even if the government successfully finds a buyer for the pipeline, it will more than likely need to sell it at a steep discount, leaving Canadian taxpayers on the hook.

More: Justin Trudeau’s Pipeline Purchase Isn’t Just Hypocritical, It’s Bad Economics

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